Good moment for Turkey to diversify its gas sources - expert

Good moment for Turkey to diversify its gas sources - expert

Baku, Azerbaijan, June 29

By Elena Kosolapova – Trend:

Turkey now has an appropriate moment to diversify its gas sources, senior fellow in Energy Policy at the Center for Eastern Studies in Warsaw, Agata Loskot-Strachota believes.

“Currently it is quite a good moment to look for new suppliers as global gas prices are low, there is abundance of gas and more and more LNG on the market and so increased amount of gas has increased gas competition,” Loskot-Strachota told Trend by email.

Yet in order to profit on that Turkey would need to be quick and effective in developing new infrastructure: LNG terminals, pipelines and storage facilities, the expert noted.

“And I am not sure if it is succeeding with the primary important step to increase its security of supply - expansion of storage capacities,” she said.

Moreover, Loskot-Strachota said that Turkey seems to have still rather limited LNG import capacities which makes it difficult to profit from new volumes of LNG available from US and Australia on the global level to Qatar on the regional level.

According to BP statistical review, gas consumption in Turkey hit 43.6 bcm in 2015, including 26.6 bcm imported from Russia. Moreover Turkey imported 7.8 bcm from Iran, 5.3 bcm from Azerbaijan, and 7.5 bcm LNG from other sources in 2015. Earlier, Turkish officials have repeatedly talked about the need to reduce dependence on Russian gas.

Loskot-Strachota noted that there was several alternative gas sources which may allow Turkey to reduce its dependence on Russian gas in future, but a number of issues should be solved to meet this goal.

In particular the expert believes an agreement on normalization of relations with Israel signed on June 28 might well serve enabling once Israeli gas exports to Turkey but it is not quite clear yet when and on what conditions it is feasible.

Moreover, there is option of some increase in Azerbaijani gas supplies to Turkey, she said, but then Turkey would be competing here with EU consumers.

Loskot-Strachota also noted that there of course is - although much more distant - option of Turkmen gas supplies - yet it needs sorting out several problems related to constructing optimal route for those gas reaching Turkish market via Caspian Sea or Iran.

In addition the expert believes that the new opening of the West relations with Iran creates longer term chances of increasing Iranian gas supplies to Turkey. But it would require though sorting out rather complicated Turkish-Iranian relations and huge investments in Iran itself, she noted.

Loskot-Strachota also said that to make any diversification of gas supplies in Turkey more effective a reform and liberalization of Turkish gas market would help - as it would enable genuine competition between different suppliers already and potentially reaching Turkish market.

However, the expert noted that there are signals of renewed interest of Turkey in cooperation with Russia and suggestions that Turkish Stream gas pipeline project could be revived - which in consequence rise question if Turkey indeed wants to diminish its dependency on Russian gas, or bets on increased interdependency in gas.

On June 27 Turkish President Recep Tayyip Erdogan sent a letter to his Russian counterpart in which he expressed deep regret for the incident with downed Russian air bomber in November 2015, which led to crisis in relations between two countries, and expressed profound condolences to the family of the Russian pilot who was killed in the accident. In his letter Erdogan also noted that Russia is Turkey’s friend and strategic partner, and the Turkish authorities do not want to ruin relations between the two countries.

Dmitry Peskov, a spokesman for Russian President Vladimir Putin assessed this letter as an important step towards the normalization of relations with Turkey. On June 29 the presidents of two countries held a phone talk and agreed on a private meeting.

Edited By SI

Follow the author on Twitter: @E_Kosolapova

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